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Bill 40, Protect Ontario by Securing Affordable Energy for Generations Act, 2025

Lecce, Hon. Stephen Minister of Energy and Mines

Current status:

Royal Assent received. Statutes of Ontario 2025,

chapter 22

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Bill 40 Royal Assent (PDF)

EXPLANATORY

NOTE

This Explanatory Note was written as a reader’s

aid to Bill 40 and does not form part of the law.

Bill 40 has been enacted as

Chapter 22 of the Statutes of Ontario, 2025.

SCHEDULE 1

ELECTRICITY ACT, 1998

The

Schedule amends the Electricity Act, 1998 . The

major elements are described below:

1. The

purposes of the Act in

section 1 are amended to add new purposes related to

economic growth and the development of a hydrogen market and economy in

Ontario.

2. The

objects of the Independent Electricity System Operator in subsection 6 (1) of

the Act are amended to add provisions relating to supporting economic growth.

3. Sections

25.33 and 25.34 of the Act are amended to provide that regulations made under

the Act may specify amounts paid to generators, the Financial Corporation and

distributors that would not be taken into account when adjustments are made to

ensure that payments of those amounts be made by specified classes of market

participants and consumers. Instead, those amounts would be paid out of money

appropriated by the Legislature, if any. Complementary amendments are made to

the regulation-making authority in

section 114.

4. New

section 28.1 is added to the Act. It provides that transmitters or distributors

shall not connect or reconnect certain load facilities from its transmission

system or distribution system unless connection requirements that are specified

in the regulations are met. Complementary amendments are made to the

regulation-making authority in

section 114.

related amendment is made to the Fixing the Hydro Mess

Act, 2019 .

SCHEDULE 2

MUNICIPAL FRANCHISES ACT

The

Schedule amends the Municipal Franchises Act .

Currently,

subsection 3 (1) of the Act provides that, before a municipality can grant the

right to use or occupy any of the highways of the municipality for a public

utility or to construct or operate a public utility in the municipality, the

municipal electors of that municipality must assent to a by-law setting out the

granted or acquired.

Section 3 is re-enacted to remove the requirement for the

municipal electors to assent to such a by-law and instead to require that a

amendments are made to other provisions of the Act to reflect that change.

Currently,

subsection 10 (1) of the Act provides that a municipality or a party having a

right to operate works for the distribution of gas may apply to the Ontario

Energy Board for an order to renew or extend the term of the right if it has

expired or will expire within one year. This subsection is amended to expand

the authority of the Ontario Energy Board so that a municipality or party may

apply to the Board for an order to renew or extend the term of a right not only

to operate, but also to construct, extend or add to works for the distribution

of gas.

transitional amendment is made to provide that applications that are made to

the Ontario Energy Board for an order under

section 9 or 10 of the Act before

the

Schedule comes into force shall be continued and disposed of in accordance

with the Act, as amended by the Schedule.

consequential amendment is made to the Public Utilities

Act .

SCHEDULE 3

ONTARIO ENERGY BOARD ACT, 1998

The

Schedule amends the Ontario Energy Board Act, 1998 .

The major elements are described below:

1. Subsection

1 (1) of the Act is amended to add a new objective of the Ontario Energy Board

respecting economic growth in relation to the regulation of the electricity

sector.

2. A

new

section 13.1 of the Act authorizes the Board’s chief executive officer to

issue internal policies respecting various procedural matters in relation to

hearings and determinations.

3. Amendments

are made to reflect the addition of

section 28.1 to the Electricity

Act, 1998 .

Section 28.1 of the Electricity Act,

1998 is made an enforceable provision under the Ontario

Energy Board Act, 1998 . Conditions requiring non-discriminatory access

in the licence of a transmitter or distributor are made subject to the

restrictions in

section 28.1 of the Electricity Act, 1998 .

Section 28.1 of the Electricity Act, 1998 and any

regulation made under that Act prevails over an order, code or licence issued

by the Board.

Section

78.3 is added to the Act. It provides that the Minister may make payments to a

transmitter out of money appropriated by the Legislature, if any. If those

payments are made to the transmitter, the Ontario Energy Board must take those

payments into account when setting rates for the transmitter under

section 78

of the Act.

Section

96 of the Act is amended in respect of applications under

section 92 of the Act

(leave to construct, etc., electricity transmission or distribution line).

Economic growth is added to the list of matters the Board is permitted to

consider when deciding whether granting leave is in the public interest. As

well, the Board is required to consider reports, documents or other information

that may be specified by the regulations made under the Act in considering an

application under

section 92.

6. Various

spent transitional provisions are repealed.

7. The

Schedule amends sections 43.1 and 73 of the Act, which establish procurement

restrictions based on country, region or territory of origin. Sections 43.1 and

73 are added to the Act by Bill 5 ( Protect Ontario by

Unleashing our Economy Act, 2025 ), introduced on April 17, 2025, and so

the amendments to those sections apply only if Bill 5 receives Royal Assent.

Bill 40 2025

Act to amend various statutes with respect to energy, the electrical sector and

public utilities

CONTENTS

Preamble

Contents

of this Act

Commencement

Short

title

Schedule 1

Electricity

Act, 1998

Schedule 2

Municipal

Franchises Act

Schedule 3

Ontario

Energy Board Act, 1998

Preamble

The

Government of Ontario is committed to:

Building

an affordable, secure, reliable and clean energy system to power the strongest

economy in the G7.

Prioritizing

economic growth, job creation and strong governance as objectives of Ontario’s

energy system.

Supporting

the responsible growth of energy-intensive industries like data centres that

align with Ontario’s economic priorities and benefit local communities.

Keeping

our energy supply secure by supporting the sector with the implementation of

limitations on foreign participation in Ontario’s energy sector.

Delivering

affordable and clean energy for generations to power our economy and peoples’

lives.

Therefore,

His Majesty, by and with the advice and consent of the Legislative Assembly of

the Province of Ontario, enacts as follows:

Contents

of this Act

1 This

Act consists of this section, sections 2 and 3 and the Schedules to this Act.

Commencement

(1) Except

as otherwise provided in this section, this Act comes into force on the day it

receives Royal Assent.

(2) The

Schedules to this Act come into force as provided in each Schedule.

(3) If

a

Schedule to this Act provides that any of its provisions are to come into

force on a day to be named by order of the Lieutenant Governor in Council, an

order may apply to one or more of those provisions, and orders may be issued at

different times with respect to any of those provisions.

Short

title

3 The

short title of this Act is the Protect

Ontario by Securing Affordable Energy for Generations Act, 2025 .

SCHEDULE 1

ELECTRICITY ACT, 1998

(1) Section 1 of the Electricity Act, 1998

is amended by adding the following clause:

(a.1.1) to

support economic growth in a manner consistent with the policies of the

Government of Ontario;

(2) Section

1 of the Act is amended by adding the following clause:

(d.1) to

facilitate the development of a hydrogen market and economy in Ontario in order

to support potential uses and applications of low-carbon hydrogen, including

for purposes directly or indirectly connected to the electricity system or

electricity sector, in a manner consistent with the policies of the Government

of Ontario;

(3) Clause

1 (

e) of the Act is amended by adding “subject to

section 28.1” at the

beginning.

Subsection 6 (1) of the Act is amended by adding the following clause:

(l.1) to

support economic growth in a manner that protects the interests of consumers;

(1) Clause 25.33 (1) (

a) of the Act is amended by adding “other than

amounts funded under

section 25.34” at the end.

(2) Clause

25.33 (2) (

a) of the Act is amended by adding “other than amounts funded under

section 25.34” at the end.

Subsection 25.34 (2) of the Act is amended by adding the following paragraph:

0.1 Such

amounts described in clause 25.33 (1) (

a) or (2) (

a) as may be prescribed by

the regulations.

Subsection 26 (1) of the Act is amended by adding “Subject to

section 28.1” at

the beginning.

Section 28 of the Act is amended by adding “Subject to

section 28.1” at the

beginning.

The Act is amended by adding the following section:

Exceptions

for specified load facilities

28.1

(1) In this

section,

“specified

connection requirements” means, in relation to a specified load facility,

(

a) any

conditions, requirements or limitations that the regulations specify must be

met for the specified load facility to be connected or reconnected to a

transmission system or distribution system, as applicable,

(

b) any

approvals that the regulations specify must be obtained for the specified load

facility to be connected or reconnected to a transmission system or

distribution system, as applicable, and

(

c) any

conditions, requirements or limitations of an approval described in clause (b);

(“exigences précisées en matière de raccordement”)

“specified

load facility” means a facility or class of facilities,

(

a) that

is a data centre and that meets any criteria that may be set out in the

regulations, or

(

b) that,

(

i) withdraws

or would, if it were connected to a transmission system or distribution system,

be expected to withdraw electricity from the IESO-controlled grid or from the

distribution system of a distributor who is licensed under

Part V of the Ontario Energy Board Act, 1998 ,

(ii) has

or would, if it were connected to a transmission system or distribution system,

be expected to have a demand for electricity at the point of connection to the

transmission system or distribution system, as applicable, that exceeds the

amount prescribed by the regulations, and

(iii) meets

any other criteria that may be set out in the regulations. (“installation de

charge précisée”)

Connection

or reconnection of specified load facilities

(2) Unless

a transmitter or distributor is satisfied that the specified connection

requirements have been complied with, the transmitter or distributor shall not,

(

a) connect

a specified load facility to its transmission system or distribution system, as

applicable; or

(

b) reconnect

a specified load facility to the transmission or distribution system after the

specified load facility was disconnected, in accordance with the regulations,

as a result of the nonfulfillment or breach of any of the specified connection

requirements.

conditions, requirements or limitations not fulfilled or breached

(3) If,

after a specified load facility is connected or reconnected to a transmission

or distribution system, the transmitter or distributor to whose system the

specified load facility is connected becomes aware that any of the applicable

specified connection or reconnection requirements have not been fulfilled or

have been breached, the transmitter or distributor shall follow the processes,

and take the actions, that are prescribed by the regulations.

Does

not affect other right to impose requirements

(4) For

greater certainty, nothing in this

section affects any right that a transmitter

or distributor may have to impose requirements in respect of the connection,

disconnection or reconnection of a specified load facility to the transmission

system or distribution system, as applicable, as long as there is no conflict

between those requirements and the requirements of this section.

Specified

connection requirements may include any necessary or advisable criteria

(5) The

regulations specifying conditions, requirements, limitations or approvals for

the specified connection requirements may include criteria respecting economic

development, job creation, anything provided for in this Act or any other

matter the Lieutenant Governor in Council considers necessary or advisable.

Transition

(6) This

section does not apply to a specified load facility in respect of which a

connection request made in accordance with the Transmission System Code or the Distribution

System Code issued under the Ontario Energy Board Act,

1998 was submitted to a transmitter or distributor, as applicable,

before June 3, 2025.

(1) Subsection 114 (1) of the Act is amended by adding the following

clauses:

(f.0.1) defining

“data centre” for the purposes of

section 28.1;

(f.0.2) prescribing

criteria for the purposes of the definition of “specified load facility” in

section

28.1, which may include, but are not limited to, criteria related to,

(

i) the

geographic area in which the specified load facility is or may be located,

(ii) the

maximum volume of electricity that the specified load facility may withdraw at

the point of connection to the transmission system or have distributed to it at

the point of connection to the distribution system, as applicable, or

(iii) the

maximum demand for electricity that the specified load facility may have at the

point of connection to the transmission system or distribution system, as

applicable;

(f.0.3) prescribing

specified connection requirements that must be complied with for a specified

load facility to be connected or reconnected to a transmission system or

distribution system, as applicable, which may include but are not limited to,

(

i) conditions,

requirements or limitations that must be met for the specified load facility to

be connected or reconnected to a transmission system or distribution system,

(ii) approvals

that must be obtained for the specified load facility to be connected or

reconnected to a transmission system or distribution system,

(iii) the

processes that must be followed to seek any approvals, to satisfy any

conditions or requirements or to comply with any limitations in the specified

connection requirements,

(iv) the

persons or classes of persons who may apply for any such approvals on behalf of

the specified load facility,

(

v) any

documents or information that must be submitted as part of any such approvals

process,

(vi) the

persons or classes of persons who are authorized to give or withhold any such

approvals, and the criteria that such persons or classes of persons must or may

consider when determining whether to give or withhold approvals,

(vii) any

conditions or requirements or limitations that must or may be included as part

of any approvals that are given,

(viii) any

obligations that the persons or classes of persons referred to in subclause

(iv) have in relation to,

(

A) giving

written notice of the determination, and

(

B) setting

out in any such notice the reasons for the determination and any conditions,

requirements or limitations that form a part of the approval;

(f.0.4) prescribing

the processes that a transmitter or distributor referred to in subsection 28.1

(3) must or may follow and the actions it must or may take if an applicable

specified connection requirement has not been fulfilled or has been breached,

which may include but are not limited to requirements related to,

(

i) the

giving of notice in respect of the nonfulfillment or breach of the specified

connection requirement, including the persons or classes of persons to whom the

notice must be given,

(ii) the

form and content of any such notice,

(iii) opportunities

for the specified load facility to remedy the breach of the specified

connection requirement and to demonstrate that the breach has been remedied,

(iv) the

disconnection of the specified load facility from the transmission or

distribution system of the transmitter or distributor, as applicable;

(2) Clause

114 (1.3) (

h) of the Act is amended by adding the following subclause:

(0.

i) setting

out amounts paid to generators, distributors or the Financial Corporation, as

specified by the regulations, for the purposes of paragraph 0.1 of that

subsection, or methods of determining those amounts,

(3) Subclause

114 (1.3) (h) (ii) of the Act is repealed.

Fixing

the Hydro Mess Act, 2019

Subsection 5 (2) of

Schedule 1 to the Fixing the Hydro

Mess Act, 2019 is repealed.

Commencement

(1) Except as otherwise provided in this section, this

Schedule

comes into force on the day the Protect Ontario by

Securing Affordable Energy for Generations Act, 2025 receives Royal

Assent.

(2) Subsection

8 (3) comes into force on a day to be named by order of the Lieutenant Governor

in Council.

SCHEDULE 2

MUNICIPAL FRANCHISES ACT

Section 3 of the Municipal Franchises Act is

repealed and the following substituted:

Restriction

municipality shall not grant to any person nor shall any person acquire the

right to use or occupy any of the highways of the municipality for a public

utility or to construct or operate any part of a public utility in the

municipality unless the municipality has passed a by-law setting out the terms

and conditions upon which and the period for which such right is to be granted

or acquired.

Subsection 4 (1) of the Act is amended by striking out “with the assent of the

municipal electors of the local municipality”.

(1) Subsection 5 (1) of the Act is repealed and the following

substituted:

Extension

of certain existing works not to be made without by-law

(1) If

a by-law granting a franchise or right in respect of a public utility under

section

3 was passed before April 16, 1912, no extension of or addition to the works or

services constructed, established or operated under the authority of such

by-law as they existed and were in operation at that date shall be made except

under the authority of a by-law passed after that date under

section 3, but that

by-law is expressly limited in its operation to a period not exceeding one

year.

(2) Subsection

5 (2) of the Act is amended by striking out “by a municipal corporation except

by by-law passed with the assent of the municipal electors as provided in

section 3” at the end and substituting “by a municipality except by by-law

passed under

section 3”.

Subsection 7 (1) of the Act is amended by striking out “and no such subsequent

by-law has any force or effect unless it is assented to by the municipal

electors as provided by subsection 3 (1)” at the end.

(1) Subsection 9 (1) of the Act is amended by striking out “shall

be submitted to the municipal electors for their assent” in the portion after

clause (

d) and substituting “shall be passed by a municipality”.

(2) Subsection

9 (4) of the Act is repealed.

(1) Subsection 10 (1) of the Act is amended by striking out “to

operate works” and substituting “to construct, operate, extend or add to

works”.

(2) Subsection

10 (5) of the Act is amended by striking out “assented to by the municipal

electors”.

The Act is amended by adding the following section:

Transition, application for order under s. 9 or

Any

application to the Ontario Energy Board for an order under

section 9 or 10 that

is made before the day

Schedule 2 to the Protect Ontario

by Securing Affordable Energy for Generations Act, 2025 comes into force

shall be continued and disposed of in accordance with this Act, as amended by

that Schedule.

Consequential

amendment

Subsection 58 (1) of the Public Utilities Act is

amended by striking out “with the assent of the municipal electors where such

assent is required” and substituting “as required”.

Commencement

This

Schedule comes into force on the day the Protect

Ontario by Securing Affordable Energy for Generations Act, 2025 receives

Royal Assent.

SCHEDULE 3

ONTARIO ENERGY BOARD ACT, 1998

Subsection 1 (1) of the Ontario Energy Board Act, 1998

is amended by adding the following paragraph:

2.1 To

regulate the electricity sector in a manner that supports economic growth, consistent

with the policies of the Government of Ontario.

The definition of “enforceable provision” in subsection 3 (1) of the Act is

amended by adding the following clause:

(c.2.1)

section

28.1 of the Electricity Act, 1998 or a provision of

a regulation made under that section,

Subsection 4.1 (22) of the Act is repealed.

Subsections 4.2 (8) and (9) of the Act are repealed.

Subsections 4.3 (14) to (18) of the Act are repealed.

The Act is amended by adding the following section:

Policies

re certain Board processes

13.1

(1) The

chief executive officer may issue policies to commissioners and employees of

the Board respecting any of the following matters:

1. Timelines

for conducting a hearing.

2. Timelines

for making a determination, if it is being made by an employee exercising a

power or performing a duty delegated to the employee under

section 6.

3. Requirements

respecting information or documents to be considered in conducting a hearing or

making a determination.

4. Any

other matter prescribed by the regulations.

Limitation

(2) Nothing

in subsection (1) authorizes the chief executive officer to issue a policy that

conflicts with this Act, the regulations or any other instrument made under

this Act, any other Act or regulation, or the rules made by the Board under

section 25.1 of the Statutory Powers Procedure Act .

Effect

of non-compliance

(3) The

failure of a person to comply with a policy issued under subsection (1) does

not affect the validity of any action taken by the person.

Section 70 of the Act is amended by adding the following subsections:

Exceptions

to non-discriminatory access

(12.1) Any

condition in the licence of a transmitter or distributor under this Part

requiring the provision of non-discriminatory access is subject to the

restrictions on connecting and reconnecting specified load facilities in

section 28.1 of the Electricity Act, 1998 and in

the regulations made under that Act.

Conflict

(12.2) In

the event of a conflict between

section 28.1 of the Electricity

Act, 1998 or any regulation made under that Act in relation to a matter

specified in that section, as applicable, and an order, code or licence issued

by the Board,

section 28.1 or the regulation, as applicable, prevails.

The Act is amended by adding the following section:

Payments

to transmitters from public funds

78.3

(1) The

Minister may make payments to a transmitter out of money appropriated for the

purposes of this

section by the Legislature, if any.

Rate

reduction

(2) The

Board shall, in approving or fixing just and reasonable rates under

section 78 for

a transmitter, reduce the rates to reflect amounts paid to the transmitter

under subsection (1).

(1) Subsection 96 (2) of the Act is amended by adding the following

paragraph:

2. Supporting

economic growth in a manner consistent with the policies of the Government of

Ontario.

(2) Section

96 of the Act is amended by adding the following subsection:

Same

(3) In

an application under

section 92, the Board shall consider such reports,

documents or other information as may be prescribed by the regulations.

Subsection 97.1 (2) of the Act is repealed.

Subsection 97.2 (4) of the Act is repealed.

Bill

5 ( Protect Ontario by Unleashing our Economy Act, 2025 )

(1) This

section applies only if Bill 5 ( Protect

Ontario by Unleashing our Economy Act, 2025 ), introduced on April 17,

2025, receives Royal Assent.

(2) References

in this

section to provisions of Bill 5 are references to those provisions as

they were numbered in the first reading version of the Bill.

(3) Subsections 43.1 (1) and (2) of

the Ontario Energy Board Act, 1998 are repealed and the following

substituted:

Procurement

restrictions

(1) No

gas transmitter, gas distributor or storage company that is prescribed by the

regulations shall procure a good or service that meets the conditions

prescribed by the regulations respecting,

(

a) its

country, region or territory of origin, as determined in the regulations; or

(

b) the

country, region or territory of origin of the person or entity that is, or that

beneficially owns or controls, a supplier of the good or service, as determined

in the regulations.

Same,

subsidiaries

(2) No

gas transmitter, gas distributor or storage company subsidiary that is

prescribed by the regulations shall procure a good or service that meets the

conditions prescribed by the regulations respecting,

(

a) its

country, region or territory of origin, as determined in the regulations; or

(

b) the

country, region or territory of origin of the person or entity that is, or that

beneficially owns or controls, a supplier of the good or service, as determined

in the regulations.

Origin

(2.1) For

the purposes of subsections (1) and (2),

(

a) country,

region or territory of origin of a person or entity may be determined by

reference to any relevant factor including, as applicable,

(

i) where

a person is ordinarily resident,

(ii) where

a head office or other office is located,

(iii) jurisdiction

of incorporation,

(iv) the

number or proportion of employees of the person or entity that are located in a

country, region or territory,

(

v) the

jurisdiction of the laws to which the person or entity is subject, or

(vi) where

the person or entity’s business activities, as they relate to the provision of

the good or service, are carried on; and

(

b) a

regulation may set out, for its own purposes, how beneficial ownership or

control is to be determined.

(4) Section

43.1 of the Act is amended by adding the following subsections:

Deferral

or variance accounts

(5) A

gas distributor, gas transmitter or storage company that is prescribed for the

purposes of subsection (1) and for which rates are approved or fixed by the

Board under

section 36 may establish a deferral or variance account that

records,

(

a) the

costs incurred by the gas distributor, gas transmitter or storage company as a

result of complying with the subsection; and

(

b) the

interest costs incurred on the principal balance of the account, as the Board

may direct.

Same

(6) The

Board shall, from time to time or as prescribed by the regulations, make an

order under

section 36 that determines whether and how amounts recorded in an

account referred to in subsection (5) shall be reflected in rates approved or

fixed under that section, subject to any requirements prescribed by the

regulations.

(5) Subsections 73 (2) and (3) of the Act are repealed and the following

substituted:

Same

(2) No

licensee that is prescribed by the regulations shall procure a good or service

that meets the conditions prescribed by the regulations respecting,

(

a) its

country, region or territory of origin, as determined in the regulations; or

(

b) the

country, region or territory of origin of the person or entity that is, or that

beneficially owns or controls, a supplier of the good or service, as determined

in the regulations.

Same,

subsidiaries

(3) No

licensee subsidiary that is prescribed by the regulations shall procure a good

or service that meets the conditions prescribed by the regulations respecting,

(

a) its

country, region or territory of origin, as determined in the regulations; or

(

b) the

country, region or territory of origin of the person or entity that is, or that

beneficially owns or controls, a supplier of the good or service, as determined

in the regulations.

Origin

(3.1) For

the purposes of subsections (2) and (3),

(

a) country,

region or territory of origin of a person or entity may be determined by

reference to any relevant factor including, as applicable,

(

i) where

a person is ordinarily resident,

(ii) where

a head office or other office is located,

(iii) jurisdiction

of incorporation,

(iv) the

number or proportion of employees of the person or entity that are located in a

country, region or territory,

(

v) the

jurisdiction of the laws to which the person or entity is subject, or

(vi) where

the person or entity’s business activities, as they relate to the provision of

the good or service, are carried on; and

(

b) a

regulation may set out, for its own purposes, how beneficial ownership or

control is to be determined.

(6) Section

73 of the Act is amended by adding the following subsections:

Deferral

or variance accounts

(6) A

licensee that is prescribed for the purposes of subsection (2) and for which

rates are approved or fixed by the Board under

section 78 may establish a

deferral or variance account that records,

(

a) the

costs incurred by the licensee as a result of complying with the subsection;

and

(

b) the

interest costs incurred on the principal balance of the account, as the Board

may direct.

Same

(7) The

Board shall, from time to time or as prescribed by the regulations, make an

order under

section 78 that determines whether and how amounts recorded in an

account referred to in subsection (6) shall be reflected in rates approved or

fixed under that section, subject to any requirements prescribed by the

regulations.

Commencement

This

Schedule comes into force on the day the Protect

Ontario by Securing Affordable Energy for Generations Act, 2025 receives

Royal Assent.

Bill 40 As Amended by Standing Committee (PDF)

This reprint of the

Bill is marked to indicate the changes that were made in Committee.

The changes are

indicated by underlines for new text and a strikethrough for deleted text.

______________

EXPLANATORY NOTE

SCHEDULE

ELECTRICITY ACT, 1998

The

Schedule amends the

Electricity

Act, 1998 .

The major elements are described below:

1. The purposes of

the Act in

section 1 are amended to add new purposes related to economic growth

and the development of a hydrogen market and economy in Ontario.

2. The objects of

the Independent Electricity System Operator in subsection 6 (1) of the Act are

amended to add provisions relating to supporting economic growth.

3 . Sections 25.33 and

25.34 of the Act are amended to provide that regulations made under the Act may

specify amounts paid to generators, the Financial Corporation and distributors

that would not be taken into account when adjustments are made to ensure that

payments of those amounts be made by specified classes of market participants

and consumers. Instead, those amounts would be paid out of money appropriated

by the Legislature, if any. Complementary amendments are made to the

regulation-making authority in

section 114.

4 . New

section 28.1 is

added to the Act. It provides that transmitters or distributors shall not

connect or reconnect certain load facilities from its transmission system or

distribution system unless connection requirements that are specified in the

regulations are met. Complementary amendments are made to the regulation-making

authority in

section 114.

A related amendment is

made to the Fixing the Hydro Mess Act, 2019 .

SCHEDULE

MUNICIPAL FRANCHISES ACT

The

Schedule amends the

Municipal

Franchises Act .

Currently, subsection 3

(1) of the Act provides that, before a municipality can grant the right to use

or occupy any of the highways of the municipality for a public utility or to

construct or operate a public utility in the municipality, the municipal electors

of that municipality must assent to a by-law setting out the terms and

conditions upon which and the period for which such right is to be granted or

acquired.

Section 3 is re-enacted to remove the requirement for the municipal

electors to assent to such a by-law and instead to require that a municipality

to other provisions of the Act to reflect that change.

Currently, subsection

10 (1) of the Act provides that a municipality or a party having a right to

operate works for the distribution of gas may apply to the Ontario Energy Board

for an order to renew or extend the term of the right if it has expired or will

expire within one year. This subsection is amended to expand the authority of

the Ontario Energy Board so that a municipality or party may apply to the Board

for an order to renew or extend the term of a right not only to operate, but

also to construct, extend or add to works for the distribution of gas.

A transitional

amendment is made to provide that applications that are made to the Ontario

Energy Board for an order under

section 9 or 10 of the Act before the

Schedule

comes into force shall be continued and disposed of in accordance with the Act,

as amended by the Schedule.

A consequential

amendment is made to the Public Utilities Act .

SCHEDULE

ONTARIO ENERGY BOARD ACT, 1998

The

Schedule amends the

Ontario

Energy Board Act, 1998 . The major elements are described below:

1. Subsection 1

(1) of the Act is amended to add a new objective of the Ontario Energy Board

respecting economic growth in relation to the regulation of the electricity

sector.

2. A new

section

13.1 of the Act authorizes the Board’s chief executive officer to issue

internal policies respecting various procedural matters in relation to hearings

and determinations.

3. Amendments are

made to reflect the addition of

section 28.1 to the Electricity

Act, 1998 .

Section 28.1 of the Electricity Act, 1998 is made an enforceable

provision under the Ontario Energy Board

Act, 1998 .

Conditions requiring non-discriminatory access in the licence of a transmitter

or distributor are made subject to the restrictions in

section 28.1 of the Electricity

Act, 1998 .

Section 28.1 of the Electricity Act, 1998 and any regulation

made under that Act prevails over an order, code or licence issued by the

Board.

Section 78.3 is

added to the Act. It provides that the Minister may make payments to a

transmitter out of money appropriated by the Legislature, if any. If those

payments are made to the transmitter, the Ontario Energy Board must take those

payments into account when setting rates for the transmitter under

section 78

of the Act.

Section 96 of

the Act is amended in respect of applications under

section 92 of the Act

(leave to construct, etc., electricity transmission or distribution line).

Economic growth is added to the list of matters the Board is permitted to

consider when deciding whether granting leave is in the public interest. As

well, the Board is required to consider reports, documents or other information

that may be specified by the regulations made under the Act in considering an

application under

section 92.

6. Various spent

transitional provisions are repealed.

7. The

Schedule

amends sections 43.1 and 7 3 of the Act respecting deferral and variance accounts connected to

costs arising from compliance with those sections and specified interest costs , which establish procurement restrictions based on

country, region or territory of origin . Sections 43.1 and 73

are added to the Act by Bill 5 ( Protect Ontario by

Unleashing our Economy Act, 2025 ), introduced on April

17, 2025, and so the amendments to those sections apply only if Bill 5 receives

Royal Assent.

Bill 40 2025

An Act to amend various statutes

with respect to energy, the electrical sector and public utilities

CONTENTS

Preamble

Contents of this Act

Commencement

Short title

Schedule

Electricity Act, 1998

Schedule

Municipal Franchises

Act

Schedule

Ontario Energy Board

Act, 1998

Preamble

The Government of

Ontario is committed to:

Building an affordable,

secure, reliable and clean energy system to power the strongest economy in the

G7.

Prioritizing economic

growth, job creation and strong governance as objectives of Ontario’s energy

system.

Supporting the

responsible growth of energy-intensive industries like data centres that align

with Ontario’s economic priorities and benefit local communities.

Keeping our energy

supply secure by supporting the sector with the implementation of limitations

on foreign participation in Ontario’s energy sector.

Delivering affordable

and clean energy for generations to power our economy and peoples’ lives.

Therefore, H is Majesty, by and with

the advice and consent of the Legislative Assembly of the Province of Ontario,

enacts as follows:

Contents of this Act

1 This Act consists of

this section, sections 2 and 3 and the Schedules to this Act.

Commencement

(1) Except as otherwise

provided in this section, this Act comes into force on the day it receives

Royal Assent.

(2) The Schedules to this

Act come into force as provided in each Schedule.

(3) If a

Schedule to this

Act provides that any of its provisions are to come into force on a day to be

named by order of the Lieutenant Governor in Council, an order may apply to one

or more of those provisions, and orders may be issued at different times with

respect to any of those provisions.

Short title

3 The

short title of this Act is the Protect

Ontario by Securing Affordable Energy for Generations Act ,

2025 .

SCHEDULE 1

ELECTRICITY ACT, 1998

(1) Section 1 of the Electricity

Act, 1998

is amended by adding the following clause:

(a.1.1) to support

economic growth in a manner consistent with the policies of the Government of

Ontario;

(2) Section 1 of the Act is

amended by adding the following clause:

(d.1) to facilitate

the development of a hydrogen market and economy in Ontario in order to support

potential uses and applications of low-carbon hydrogen, including for purposes

directly or indirectly connected to the electricity system or electricity

sector, in a manner consistent with the policies of the Government of Ontario;

(3) Clause 1 (

e) of the Act

is amended by adding “subject to

section 28.1” at the beginning.

2 Subsection 6 (1) of the

Act is amended by adding the following clause:

(l.1) to support

economic growth in a manner that protects the interests of consumers;

(1) Clause 25.33 (1) (

a) of

the Act is amended by adding “other than amounts funded under

section 25.34” at

the end.

(2) Clause 25.33 (2) (

a) of

the Act is amended by adding “other than amounts funded under

section 25.34” at

the end.

4 Subsection 25.34 (2) of

the Act is amended by adding the following paragraph:

0.1 Such amounts

described in clause 25.33 (1) (

a) or (2) (

a) as may be prescribed by the

regulations.

5 Subsection 26 (1) of

the Act is amended by adding “Subject to

section 28.1” at the beginning.

Section 28 of the Act

is amended by adding “Subject to

section 28.1” at the beginning.

7 The Act is amended by

adding the following section:

Exceptions for specified load

facilities

28.1

(1) In this section,

“specified connection

requirements” means, in relation to a specified load facility,

(

a) any conditions,

requirements or limitations that the regulations specify must be met for the

specified load facility to be connected or reconnected to a transmission system

or distribution system, as applicable,

(

b) any approvals

that the regulations specify must be obtained for the specified load facility

to be connected or reconnected to a transmission system or distribution system,

as applicable, and

(

c) any

conditions, requirements or limitations of an approval described in clause (b);

(“ exigences

précisées en matière de raccordement ”)

“specified load

facility” means

a facility or class of facilities,

(

a) that is a data centre and

that meets any criteria that may

be set out in the regulations , or

(

b) that,

(

i) withdraws

or would, if it were connected to a transmission system or distribution system,

be expected to withdraw electricity from the IESO-controlled grid or from the

distribution system of a distributor who is licensed under

Part V of the Ontario

Energy Board Act, 1998 ,

(ii) has or would, if it

were connected to a transmission system or distribution system, be expected to

have a demand for electricity at the point of connection to the transmission

system or distribution system, as applicable, that exceeds the amount prescribed

by the regulations, and

(iii) meets

any other criteria that may be set out in the regulations. (“installation de

charge précisée”)

Connection or

reconnection of specified load facilities

(2) Unless a transmitter or

distributor is satisfied that the specified connection requirements have been

complied with, the transmitter or distributor shall not,

(

a) connect a

specified load facility to its transmission system or distribution system, as

applicable; or

(

b) reconnect a

specified load facility to the transmission or distribution system after the

specified load facility was disconnected, in accordance with the regulations,

as a result of the nonfulfillment or breach of any of the specified connection

requirements.

If conditions,

requirements or limitations not fulfilled or breached

(3) If, after a specified

load facility is connected or reconnected to a transmission or

distribution system, the transmitter or distributor to whose system the

specified load facility is connected becomes aware that any of the applicable

specified connection or reconnection requirements have not

been fulfilled or have been breached, the transmitter or distributor shall

follow the processes, and take the actions, that are prescribed by the

regulations.

Does not affect other

right to impose requirements

(4) For greater certainty,

nothing in this

section affects any right that a transmitter or distributor may

have to impose requirements in respect of the connection, disconnection or

reconnection of a specified load facility to the transmission system or

distribution system, as applicable, as long as there is no conflict between

those requirements and the requirements of this section.

Specified connection

requirements may include any necessary or advisable criteria

(5) The regulations

specifying conditions, requirements, limitations or approvals for the specified

connection requirements may include criteria respecting economic development,

job creation, anything provided for in this Act or any other matter the

Lieutenant Governor in Council considers necessary or advisable.

Transition

(6) This

section does not

apply to a specified load facility in respect of which a connection request

made in accordance with the Transmission System Code or the Distribution System

Code issued under the Ontario Energy Board

Act, 1998

was submitted to a transmitter or distributor, as applicable, before June 3, 2025 .

8 (1) Subsection 114 (1) of

the Act is amended by adding the following clauses:

(f.0.1) defining “data centre”

for the purposes of

section 28.1;

(f.0.2) prescribing criteria

for the purposes of the definition of “specified load facility” in

section

28.1, which may include, but are not limited to, criteria related to,

(

i) the

geographic area in which the specified load facility is or may be located,

(ii) the

maximum volume of electricity that the specified load facility may withdraw at

the point of connection to the transmission system or have distributed to it at

the point of connection to the distribution system, as applicable, or

(iii) the

maximum demand for electricity that the specified load facility may have at the

point of connection to the transmission system or distribution system, as

applicable;

(f.0. 3 ) prescribing

specified connection requirements that must be complied with for a specified

load facility to be connected or reconnected to a transmission system or

distribution system, as applicable, which may include but are not limited to,

(

i) conditions,

requirements or limitations that must be met for the specified load facility to

be connected or reconnected to a transmission system or distribution system,

(ii) approvals

that must be obtained for the specified load facility to be connected or

reconnected to a transmission system or distribution system,

(iii) the

processes that must be followed to seek any approvals, to satisfy any

conditions or requirements or to comply with any limitations in the specified

connection requirements,

(iv) the

persons or classes of persons who may apply for any such approvals on behalf of

the specified load facility,

(

v) any

documents or information that must be submitted as part of any such approvals

process,

(vi) the

persons or classes of persons who are authorized to give or withhold any such

approvals, and the criteria that such persons or classes of persons must or may

consider when determining whether to give or withhold approvals,

(vii) any

conditions or requirements or limitations that must or may be included as part

of any approvals that are given,

(viii) any

obligations that the persons or classes of persons referred to in subclause

(iv) have in relation to,

(

A) giving

written notice of the determination, and

(

B) setting

out in any such notice the reasons for the determination and any conditions,

requirements or limitations that form a part of the approval;

(f.0. 4 ) prescribing the

processes that a transmitter or distributor referred to in subsection 28.1

(3) must or may follow and the actions it must or may take if an applicable

specified connection requirement has not been fulfilled or has been breached,

which may include but are not limited to requirements related to,

(

i) the

giving of notice in respect of the nonfulfillment or breach of the specified

connection requirement, including the persons or classes of persons to whom the

notice must be given,

(ii) the

form and content of any such notice,

(iii) opportunities

for the specified load facility to remedy the breach of the specified

connection requirement and to demonstrate that the breach has been remedied,

(iv) the

disconnection of the specified load facility from the transmission or

distribution system of the transmitter or distributor, as applicable;

(2) Clause 114 (1.3) (

h) of

the Act is amended by adding the following subclause:

(0.

i) setting

out amounts paid to generators, distributors or the Financial Corporation, as

specified by the regulations, for the purposes of paragraph 0.1 of that

subsection, or methods of determining those amounts,

(3) Subclause 114 (1.3) (h)

(ii) of the Act is repealed.

Fixing the Hydro Mess

Act, 2019

9 Subsection 5 (2) of

Schedule 1 to the Fixing the Hydro Mess

Act, 2019

is repealed.

Commencement

(1) Except as otherwise

provided in this section, this

Schedule comes into force on the day the Protect Ontario by

Securing Affordable Energy for Generations Act ,

2025 receives Royal Assent.

(2) Subsection 8 (3) comes into force

on a day to be named by order of the Lieutenant Governor in Council.

SCHEDULE 2

MUNICIPAL FRANCHISES ACT

Section 3 of the Municipal

Franchises Act is repealed and the following substituted:

Restriction

3 A municipality shall

not grant to any person nor shall any person acquire the right to use or occupy

any of the highways of the municipality for a public utility or to construct or

operate any part of a public utility in the municipality unless the

which and the period for which such right is to be granted or acquired.

2 Subsection 4 (1) of the

Act is amended by striking out “ with the assent of the municipal electors of

the local municipality ”.

3 (1) Subsection 5 (1) of the

Act is repealed and the following substituted:

Extension of certain

existing works not to be made without by-law

(1) If a by-law granting a

franchise or right in respect of a public utility under

section 3 was passed

before April 16, 1912, no extension of or addition to the works or services

constructed, established or operated under the authority of such by-law as they

existed and were in operation at that date shall be made except under the

authority of a by-law passed after that date under

section 3, but that by-law

is expressly limited in its operation to a period not exceeding one year.

(2) Subsection 5 (2) of the

Act is amended by striking out “ by a municipal corporation except by by-law

passed with the assent of the municipal electors as provided in

section 3 ” at the end and

substituting “by a municipality except by by-law passed under

section 3”.

4 Subsection 7 (1) of the

Act is amended by striking out “ and no such subsequent by-law has any force or

effect unless it is assented to by the municipal electors as provided by

subsection 3 (1) ”

at the end.

5 (1) Subsection 9

(1) of the Act is amended by striking out “ shall be submitted to

the municipal electors for their assent ” in the portion after

clause (

d) and substituting “shall be passed by a municipality”.

(2) Subsection 9 (4) of the

Act is repealed.

6 (1) Subsection 10 (1) of

the Act is amended by striking out “ to operate works ” and substituting “to construct, operate, extend or add to works”.

(2) Subsection 10 (5) of

the Act is amended by striking out “ assented to by the municipal electors ”.

7 The Act is amended by

adding the following section:

Transition, application for order under s. 9 or

11 Any application to the

Ontario Energy Board for an order under

section 9 or 10 that is made before the

day

Schedule 2 to the Protect

Ontario by Securing Affordable Energy for Generations Act ,

2025 comes into force shall

be continued and disposed of in accordance with this Act, as amended by that

Schedule.

Consequential amendment

8 Subsection 58 (1) of

the Public

Utilities Act is amended by striking out “ with the assent of the

municipal electors where such assent is required ” and substituting “as

required”.

Commencement

9 This

Schedule comes

into force on the day the Protect Ontario by

Securing Affordable Energy for Generations Act ,

2025 receives Royal Assent.

SCHEDULE 3

ONTARIO ENERGY BOARD ACT, 1998

1 Subsection 1 (1) of the

Ontario

Energy Board Act, 1998 is amended by adding the following paragraph:

2.1 To regulate the

electricity sector in a manner that supports economic growth, consistent with

the policies of the Government of Ontario.

2 The definition of

“enforceable provision” in subsection 3 (1) of the Act is amended by adding the

following clause:

(c.2.1)

section 28.1

of the Electricity

Act, 1998

or a provision of a regulation made under that section,

3 Subsection 4.1 (22) of

the Act is repealed.

4 Subsections 4.2 (8) and

(9) of the Act are repealed.

5 Subsections 4.3 (14) to

(18) of the Act are repealed.

6 The Act is amended by

adding the following section:

Policies re certain

Board processes

13.1

(1) The chief executive

officer may issue policies to commissioners and employees of the Board

respecting any of the following matters:

1. Timelines for

conducting a hearing.

2. Timelines for

making a determination, if it is being made by an employee exercising a power

or performing a duty delegated to the employee under

section 6.

3. Requirements

respecting information or documents to be considered in conducting a hearing or

making a determination.

4. Any other

matter prescribed by the regulations.

Limitation

(2) Nothing in subsection

(1) authorizes the chief executive officer to issue a policy that conflicts

with this Act, the regulations or any other instrument made under this Act, any

other Act or regulation, or the rules made by the Board under

section 25.1 of

the Statutory

Powers Procedure Act .

Effect of

non-compliance

(3) The failure of a person

to comply with a policy issued under subsection (1) does not affect the

validity of any action taken by the person.

Section 70 of the Act

is amended by adding the following subsections:

Exceptions to

non-discriminatory access

(12.1) Any condition in the

licence of a transmitter or distributor under this Part requiring the provision

of non-discriminatory access is subject to the restrictions on connecting and

reconnecting specified load facilities in

section 28.1 of the Electricity

Act, 1998

and in the regulations made under that Act.

Conflict

(12.2) In the event of a

conflict between

section 28.1 of the Electricity Act, 1998 or any regulation made

under that Act in relation to a matter specified in that section, as

applicable, and an order, code or licence issued by the Board,

section 28.1 or

the regulation, as applicable, prevails.

8 The Act is amended by

adding the following section:

Payments to

transmitters from public funds

78.3

(1) The Minister may make

payments to a transmitter out of money appropriated for the purposes of this

section by the Legislature, if any.

Rate reduction

(2) The Board shall, in

approving or fixing just and reasonable rates under

section 78 for a

transmitter, reduce the rates to reflect amounts paid to the transmitter under

subsection (1).

9 (1) Subsection 96 (2) of

the Act is amended by adding the following paragraph:

2. Supporting

economic growth in a manner consistent with the policies of the Government of

Ontario.

(2) Section 96 of the Act

is amended by adding the following subsection:

Same

(3) In an application under

section 92, the Board shall consider such reports, documents or other

information as may be prescribed by the regulations.

10 Subsection 97.1 (2) of

the Act is repealed.

11 Subsection 97.2 (4) of

the Act is repealed.

Bill 5 ( Protect

Ontario by Unleashing our Economy Act, 2025 )

(1) This

section applies

only if Bill 5 ( Protect Ontario by Unleashing our

Economy Act, 2025 ) , introduced on April 17, 2025, receives Royal

Assent.

(2) References in this

section to provisions of Bill 5 are references to those provisions as they were

numbered in the first reading version of the Bill.

(2.1) Subsections

43.1 (1) and (2) of the Ontario Energy Board Act, 1998 are repealed and the following substituted:

Procurement restrictions

(1) No gas transmitter, gas distributor or

storage company that is prescribed by the regulations shall procure a good or

service that meets the conditions prescribed by the regulations respecting,

(

a) its country, region or territory of origin, as

determined in the regulations; or

(

b) the country, region or territory of origin of the

person or entity that is, or that beneficially owns or controls, a supplier of

the good or service, as determined in the regulations.

Same, subsidiaries

(2) No gas transmitter, gas distributor or

storage company subsidiary that is prescribed by the regulations shall procure

a good or service that meets the conditions prescribed by the regulations

respecting,

(

a) its country, region or territory of origin, as

determined in the regulations; or

(

b) the country, region or territory of origin of the

person or entity that is, or that beneficially owns or controls, a supplier of

the good or service, as determined in the regulations.

Origin

(2.1) For the purposes of subsections (1) and

(2),

(

a) country, region or territory of origin of a person

or entity may be determined by reference to any relevant factor including, as

applicable,

(

i) where a person is ordinarily resident,

(ii) where a head office or other office is

located,

(iii) jurisdiction of incorporation,

(iv) the number or proportion of employees

of the person or entity that are located in a country, region or territory,

(

v) the jurisdiction of the laws to which

the person or entity is subject, or

(vi) where the person or entity’s business

activities, as they relate to the provision of the good or service, are carried

on; and

(

b) a regulation may set out, for its own purposes, how

beneficial ownership or control is to be determined.

(3) Section 43.1 of the Act i s amended by adding the

following subsections:

Deferral or variance

accounts

(5) A gas distributor, gas

transmitter or storage company that is prescribed for the purposes of

subsection (1) and for which rates are approved or fixed by the Board under

section 36 may establish a deferral or variance account that records,

(

a) the costs

incurred by the gas distributor, gas transmitter or storage company as a result

of complying with the subsection; and

(

b) the interest

costs incurred on the principal balance of the account, as the Board may

direct.

Same

(6) The Board shall, from

time to time or as prescribed by the regulations, make an order under

section

36 that determines whether and how amounts recorded in an account referred to

in subsection (5) shall be reflected in rates approved or fixed under that

section, subject to any requirements prescribed by the regulations.

(3.1) Subsections 73 (2) and (3) of the Act are repealed

and the following substituted:

Same

(2) No licensee that is prescribed by the

regulations shall procure a good or service that meets the conditions

prescribed by the regulations respecting,

(

a) its country, region or territory of origin, as

determined in the regulations; or

(

b) the country, region or territory of origin of the

person or entity that is, or that beneficially owns or controls, a supplier of

the good or service, as determined in the regulations.

Same, subsidiaries

(3) No licensee subsidiary that is prescribed

by the regulations shall procure a good or service that meets the conditions

prescribed by the regulations respecting,

(

a) its country, region or territory of origin, as

determined in the regulations; or

(

b) the country, region or territory of origin of the

person or entity that is, or that beneficially owns or controls, a supplier of

the good or service, as determined in the regulations.

Origin

(3.1) For the purposes of subsections (2) and

(3),

(

a) country, region or territory of origin of a person

or entity may be determined by reference to any relevant factor including, as

applicable,

(

i) where a person is ordinarily resident,

(ii) where a head office or other office is

located,

(iii) jurisdiction of incorporation,

(iv) the number or proportion of employees of

the person or entity that are located in a country, region or territory,

(

v) the jurisdiction of the laws to which the

person or entity is subject, or

(vi) where the person or entity’s business

activities, as they relate to the provision of the good or service, are carried

on; and

(

b) a

regulation may set out, for its own purposes, how beneficial ownership or

control is to be determined.

(4) Section 73 of the Act is amended by adding

the following subsections:

Deferral or variance

accounts

(6) A licensee that is

prescribed for the purposes of subsection (2) and for which rates are approved

or fixed by the Board under

section 78 may establish a deferral or variance

account that records,

(

a) the costs

incurred by the licensee as a result of complying with the subsection; and

(

b) the interest

costs incurred on the principal balance of the account, as the Board may

direct.

Same

(7) The Board shall, from

time to time or as prescribed by the regulations, make an order under

section 78

that determines whether and how amounts recorded in an account referred to in

subsection (6) shall be reflected in rates approved or fixed under that

section, subject to any requirements prescribed by the regulations.

Commencement

13 T his

Schedule comes into

force on the day the Protect Ontario by

Securing Affordable Energy for Generations Act ,

2025 receives Royal Assent.

Bill 40 Original (PDF)

EXPLANATORY

NOTE

SCHEDULE 1

ELECTRICITY ACT, 1998

The

Schedule amends the Electricity Act, 1998 . The

major elements are described below:

1. The

purposes of the Act in

section 1 are amended to add new purposes related to

economic growth and the development of a hydrogen market and economy in

Ontario.

2. The

objects of the Independent Electricity System Operator in subsection 6 (1) of

the Act are amended to add provisions relating to supporting economic growth.

3. Sections

25.33 and 25.34 of the Act are amended to provide that regulations made under

the Act may specify amounts paid to generators, the Financial Corporation and

distributors that would not be taken into account when adjustments are made to

ensure that payments of those amounts be made by specified classes of market

participants and consumers. Instead, those amounts would be paid out of money

appropriated by the Legislature, if any. Complementary amendments are made to

the regulation-making authority in

section 114.

4. New

section 28.1 is added to the Act. It provides that transmitters or distributors

shall not connect or reconnect certain load facilities from its transmission

system or distribution system unless connection requirements that are specified

in the regulations are met. Complementary amendments are made to the

regulation-making authority in

section 114.

related amendment is made to the Fixing the Hydro Mess

Act, 2019 .

SCHEDULE 2

MUNICIPAL FRANCHISES ACT

The

Schedule amends the Municipal Franchises Act .

Currently,

subsection 3 (1) of the Act provides that, before a municipality can grant the

right to use or occupy any of the highways of the municipality for a public

utility or to construct or operate a public utility in the municipality, the

municipal electors of that municipality must assent to a by-law setting out the

granted or acquired.

Section 3 is re-enacted to remove the requirement for the

municipal electors to assent to such a by-law and instead to require that a

amendments are made to other provisions of the Act to reflect that change.

Currently,

subsection 10 (1) of the Act provides that a municipality or a party having a

right to operate works for the distribution of gas may apply to the Ontario

Energy Board for an order to renew or extend the term of the right if it has

expired or will expire within one year. This subsection is amended to expand

the authority of the Ontario Energy Board so that a municipality or party may

apply to the Board for an order to renew or extend the term of a right not only

to operate, but also to construct, extend or add to works for the distribution

of gas.

transitional amendment is made to provide that applications that are made to

the Ontario Energy Board for an order under

section 9 or 10 of the Act before

the

Schedule comes into force shall be continued and disposed of in accordance

with the Act, as amended by the Schedule.

consequential amendment is made to the Public Utilities

Act .

SCHEDULE 3

ONTARIO ENERGY BOARD ACT, 1998

The

Schedule amends the Ontario Energy Board Act, 1998 .

The major elements are described below:

1. Subsection

1 (1) of the Act is amended to add a new objective of the Ontario Energy Board

respecting economic growth in relation to the regulation of the electricity

sector.

2. A

new

section 13.1 of the Act authorizes the Board’s chief executive officer to

issue internal policies respecting various procedural matters in relation to

hearings and determinations.

3. Amendments

are made to reflect the addition of

section 28.1 to the Electricity

Act, 1998 .

Section 28.1 of the Electricity Act,

1998 is made an enforceable provision under the Ontario

Energy Board Act, 1998 . Conditions requiring non-discriminatory access

in the licence of a transmitter or distributor are made subject to the

restrictions in

section 28.1 of the Electricity Act, 1998 .

Section 28.1 of the Electricity Act, 1998 and any

regulation made under that Act prevails over an order, code or licence issued

by the Board.

Section

78.3 is added to the Act. It provides that the Minister may make payments to a

transmitter out of money appropriated by the Legislature, if any. If those

payments are made to the transmitter, the Ontario Energy Board must take those

payments into account when setting rates for the transmitter under

section 78

of the Act.

Section

96 of the Act is amended in respect of applications under

section 92 of the Act

(leave to construct, etc., electricity transmission or distribution line).

Economic growth is added to the list of matters the Board is permitted to

consider when deciding whether granting leave is in the public interest. As

well, the Board is required to consider reports, documents or other information

that may be specified by the regulations made under the Act in considering an

application under

section 92.

6. Various

spent transitional provisions are repealed.

7. The

Schedule amends sections 43.1 and 73 of the Act respecting deferral and

variance accounts connected to costs arising from compliance with those

sections and specified interest costs. Sections 43.1 and 73 are added to the

Act by Bill 5 ( Protect Ontario by Unleashing our Economy

Act, 2025 ), introduced on April 17, 2025, and so the amendments to those

sections apply only if Bill 5 receives Royal Assent.

Bill 40 2025

Act to amend various statutes with respect to energy, the electrical sector and

public utilities

CONTENTS

Preamble

Contents

of this Act

Commencement

Short

title

Schedule 1

Electricity

Act, 1998

Schedule 2

Municipal

Franchises Act

Schedule 3

Ontario

Energy Board Act, 1998

Preamble

The

Government of Ontario is committed to:

Building

an affordable, secure, reliable and clean energy system to power the strongest

economy in the G7.

Prioritizing

economic growth, job creation and strong governance as objectives of Ontario’s

energy system.

Supporting

the responsible growth of energy-intensive industries like data centres that

align with Ontario’s economic priorities and benefit local communities.

Keeping

our energy supply secure by supporting the sector with the implementation of

limitations on foreign participation in Ontario’s energy sector.

Delivering

affordable and clean energy for generations to power our economy and peoples’

lives.

Therefore,

His Majesty, by and with the advice and consent of the Legislative Assembly of

the Province of Ontario, enacts as follows:

Contents

of this Act

1 This

Act consists of this section, sections 2 and 3 and the Schedules to this Act.

Commencement

(1) Except

as otherwise provided in this section, this Act comes into force on the day it

receives Royal Assent.

(2) The

Schedules to this Act come into force as provided in each Schedule.

(3) If

a

Schedule to this Act provides that any of its provisions are to come into

force on a day to be named by order of the Lieutenant Governor in Council, an

order may apply to one or more of those provisions, and orders may be issued at

different times with respect to any of those provisions.

Short

title

3 The

short title of this Act is the Protect

Ontario by Securing Affordable Energy for Generations Act, 2025 .

SCHEDULE 1

ELECTRICITY ACT, 1998

(1) Section 1 of the Electricity Act, 1998

is amended by adding the following clause:

(a.1.1) to

support economic growth in a manner consistent with the policies of the

Government of Ontario;

(2) Section

1 of the Act is amended by adding the following clause:

(d.1) to

facilitate the development of a hydrogen market and economy in Ontario in order

to support potential uses and applications of low-carbon hydrogen, including

for purposes directly or indirectly connected to the electricity system or

electricity sector, in a manner consistent with the policies of the Government

of Ontario;

(3) Clause

1 (

e) of the Act is amended by adding “subject to

section 28.1” at the

beginning.

Subsection 6 (1) of the Act is amended by adding the following clause:

(l.1) to

support economic growth in a manner that protects the interests of consumers;

(1) Clause 25.33 (1) (

a) of the Act is amended by adding “other than

amounts funded under

section 25.34” at the end.

(2) Clause

25.33 (2) (

a) of the Act is amended by adding “other than amounts funded under

section 25.34” at the end.

Subsection 25.34 (2) of the Act is amended by adding the following paragraph:

0.1 Such

amounts described in clause 25.33 (1) (

a) or (2) (

a) as may be prescribed by

the regulations.

Subsection 26 (1) of the Act is amended by adding “Subject to

section 28.1” at

the beginning.

Section 28 of the Act is amended by adding “Subject to

section 28.1” at the

beginning.

The Act is amended by adding the following section:

Exceptions

for specified load facilities

28.1

(1) In this

section,

“specified

connection requirements” means, in relation to a specified load facility,

(

a) any

conditions, requirements or limitations that the regulations specify must be

met for the specified load facility to be connected or reconnected to a

transmission system or distribution system, as applicable,

(

b) any

approvals that the regulations specify must be obtained for the specified load

facility to be connected or reconnected to a transmission system or

distribution system, as applicable, and

(

c) any

conditions, requirements or limitations of an approval described in clause (b);

(“exigences précisées en matière de raccordement”)

“specified

load facility” means a facility or class of facilities,

(

a) that

is a data centre and that meets any criteria that may be set out in the

regulations, or

(

b) that,

(

i) withdraws

or would, if it were connected to a transmission system or distribution system,

be expected to withdraw electricity from the IESO-controlled grid or from the

distribution system of a distributor who is licensed under

Part V of the Ontario Energy Board Act, 1998 ,

(ii) has

or would, if it were connected to a transmission system or distribution system,

be expected to have a demand for electricity at the point of connection to the

transmission system or distribution system, as applicable, that exceeds the

amount prescribed by the regulations, and

(iii) meets

any other criteria that may be set out in the regulations. (“installation de

charge précisée”)

Connection

or reconnection of specified load facilities

(2) Unless

a transmitter or distributor is satisfied that the specified connection

requirements have been complied with, the transmitter or distributor shall not,

(

a) connect

a specified load facility to its transmission system or distribution system, as

applicable; or

(

b) reconnect

a specified load facility to the transmission or distribution system after the

specified load facility was disconnected, in accordance with the regulations,

as a result of the nonfulfillment or breach of any of the specified connection

requirements.

conditions, requirements or limitations not fulfilled or breached

(3) If,

after a specified load facility is connected or reconnected to a transmission

or distribution system, the transmitter or distributor to whose system the

specified load facility is connected becomes aware that any of the applicable

specified connection or reconnection requirements have not been fulfilled or

have been breached, the transmitter or distributor shall follow the processes,

and take the actions, that are prescribed by the regulations.

Does

not affect other right to impose requirements

(4) For

greater certainty, nothing in this

section affects any right that a transmitter

or distributor may have to impose requirements in respect of the connection,

disconnection or reconnection of a specified load facility to the transmission

system or distribution system, as applicable, as long as there is no conflict

between those requirements and the requirements of this section.

Specified

connection requirements may include any necessary or advisable criteria

(5) The

regulations specifying conditions, requirements, limitations or approvals for

the specified connection requirements may include criteria respecting economic

development, job creation, anything provided for in this Act or any other

matter the Lieutenant Governor in Council considers necessary or advisable.

Transition

(6) This

section does not apply to a specified load facility in respect of which a

connection request made in accordance with the Transmission System Code or the Distribution

System Code issued under the Ontario Energy Board Act,

1998 was submitted to a transmitter or distributor, as applicable,

before June 3, 2025.

(1) Subsection 114 (1) of the Act is amended by adding the following

clauses:

(f.0.1) defining

“data centre” for the purposes of

section 28.1;

(f.0.2) prescribing

criteria for the purposes of the definition of “specified load facility” in

section

28.1, which may include, but are not limited to, criteria related to,

(

i) the

geographic area in which the specified load facility is or may be located,

(ii) the

maximum volume of electricity that the specified load facility may withdraw at

the point of connection to the transmission system or have distributed to it at

the point of connection to the distribution system, as applicable, or

(iii) the

maximum demand for electricity that the specified load facility may have at the

point of connection to the transmission system or distribution system, as

applicable;

(f.0.3) prescribing

specified connection requirements that must be complied with for a specified

load facility to be connected or reconnected to a transmission system or

distribution system, as applicable, which may include but are not limited to,

(

i) conditions,

requirements or limitations that must be met for the specified load facility to

be connected or reconnected to a transmission system or distribution system,

(ii) approvals

that must be obtained for the specified load facility to be connected or

reconnected to a transmission system or distribution system,

(iii) the

processes that must be followed to seek any approvals, to satisfy any

conditions or requirements or to comply with any limitations in the specified

connection requirements,

(iv) the

persons or classes of persons who may apply for any such approvals on behalf of

the specified load facility,

(

v) any

documents or information that must be submitted as part of any such approvals

process,

(vi) the

persons or classes of persons who are authorized to give or withhold any such

approvals, and the criteria that such persons or classes of persons must or may

consider when determining whether to give or withhold approvals,

(vii) any

conditions or requirements or limitations that must or may be included as part

of any approvals that are given,

(viii) any

obligations that the persons or classes of persons referred to in subclause

(iv) have in relation to,

(

A) giving

written notice of the determination, and

(

B) setting

out in any such notice the reasons for the determination and any conditions,

requirements or limitations that form a part of the approval;

(f.0.4) prescribing

the processes that a transmitter or distributor referred to in subsection 28.1

(3) must or may follow and the actions it must or may take if an applicable

specified connection requirement has not been fulfilled or has been breached,

which may include but are not limited to requirements related to,

(

i) the

giving of notice in respect of the nonfulfillment or breach of the specified

connection requirement, including the persons or classes of persons to whom the

notice must be given,

(ii) the

form and content of any such notice,

(iii) opportunities

for the specified load facility to remedy the breach of the specified

connection requirement and to demonstrate that the breach has been remedied,

(iv) the

disconnection of the specified load facility from the transmission or

distribution system of the transmitter or distributor, as applicable;

(2) Clause

114 (1.3) (

h) of the Act is amended by adding the following subclause:

(0.

i) setting

out amounts paid to generators, distributors or the Financial Corporation, as

specified by the regulations, for the purposes of paragraph 0.1 of that

subsection, or methods of determining those amounts,

(3) Subclause

114 (1.3) (h) (ii) of the Act is repealed.

Fixing

the Hydro Mess Act, 2019

Subsection 5 (2) of

Schedule 1 to the Fixing the Hydro

Mess Act, 2019 is repealed.

Commencement

(1) Except as otherwise provided in this section, this

Schedule

comes into force on the day the Protect Ontario by

Securing Affordable Energy for Generations Act, 2025 receives Royal

Assent.

(2) Subsection

8 (3) comes into force on a day to be named by order of the Lieutenant Governor

in Council.

SCHEDULE 2

MUNICIPAL FRANCHISES ACT

Section 3 of the Municipal Franchises Act is

repealed and the following substituted:

Restriction

municipality shall not grant to any person nor shall any person acquire the

right to use or occupy any of the highways of the municipality for a public

utility or to construct or operate any part of a public utility in the

municipality unless the municipality has passed a by-law setting out the terms

and conditions upon which and the period for which such right is to be granted

or acquired.

Subsection 4 (1) of the Act is amended by striking out “with the assent of the

municipal electors of the local municipality”.

(1) Subsection 5 (1) of the Act is repealed and the following

substituted:

Extension

of certain existing works not to be made without by-law

(1) If

a by-law granting a franchise or right in respect of a public utility under

section

3 was passed before April 16, 1912, no extension of or addition to the works or

services constructed, established or operated under the authority of such

by-law as they existed and were in operation at that date shall be made except

under the authority of a by-law passed after that date under

section 3, but that

by-law is expressly limited in its operation to a period not exceeding one

year.

(2) Subsection

5 (2) of the Act is amended by striking out “by a municipal corporation except

by by-law passed with the assent of the municipal electors as provided in

section 3” at the end and substituting “by a municipality except by by-law

passed under

section 3”.

Subsection 7 (1) of the Act is amended by striking out “and no such subsequent

by-law has any force or effect unless it is assented to by the municipal

electors as provided by subsection 3 (1)” at the end.

(1) Subsection 9 (1) of the Act is amended by striking out “shall

be submitted to the municipal electors for their assent” in the portion after

clause (

d) and substituting “shall be passed by a municipality”.

(2) Subsection

9 (4) of the Act is repealed.

(1) Subsection 10 (1) of the Act is amended by striking out “to

operate works” and substituting “to construct, operate, extend or add to

works”.

(2) Subsection

10 (5) of the Act is amended by striking out “assented to by the municipal

electors”.

The Act is amended by adding the following section:

Transition, application for order under s. 9 or

Any

application to the Ontario Energy Board for an order under

section 9 or 10 that

is made before the day

Schedule 2 to the Protect Ontario

by Securing Affordable Energy for Generations Act, 2025 comes into force

shall be continued and disposed of in accordance with this Act, as amended by

that Schedule.

Consequential

amendment

Subsection 58 (1) of the Public Utilities Act is

amended by striking out “with the assent of the municipal electors where such

assent is required” and substituting “as required”.

Commencement

This

Schedule comes into force on the day the Protect

Ontario by Securing Affordable Energy for Generations Act, 2025 receives

Royal Assent.

SCHEDULE 3

ONTARIO ENERGY BOARD ACT, 1998

Subsection 1 (1) of the Ontario Energy Board Act, 1998

is amended by adding the following paragraph:

2.1 To

regulate the electricity sector in a manner that supports economic growth, consistent

with the policies of the Government of Ontario.

The definition of “enforceable provision” in subsection 3 (1) of the Act is

amended by adding the following clause:

(c.2.1)

section

28.1 of the Electricity Act, 1998 or a provision of

a regulation made under that section,

Subsection 4.1 (22) of the Act is repealed.

Subsections 4.2 (8) and (9) of the Act are repealed.

Subsections 4.3 (14) to (18) of the Act are repealed.

The Act is amended by adding the following section:

Policies

re certain Board processes

13.1

(1) The

chief executive officer may issue policies to commissioners and employees of

the Board respecting any of the following matters:

1. Timelines

for conducting a hearing.

2. Timelines

for making a determination, if it is being made by an employee exercising a

power or performing a duty delegated to the employee under

section 6.

3. Requirements

respecting information or documents to be considered in conducting a hearing or

making a determination.

4. Any

other matter prescribed by the regulations.

Limitation

(2) Nothing

in subsection (1) authorizes the chief executive officer to issue a policy that

conflicts with this Act, the regulations or any other instrument made under

this Act, any other Act or regulation, or the rules made by the Board under

section 25.1 of the Statutory Powers Procedure Act .

Effect

of non-compliance

(3) The

failure of a person to comply with a policy issued under subsection (1) does

not affect the validity of any action taken by the person.

Section 70 of the Act is amended by adding the following subsections:

Exceptions

to non-discriminatory access

(12.1) Any

condition in the licence of a transmitter or distributor under this Part

requiring the provision of non-discriminatory access is subject to the

restrictions on connecting and reconnecting specified load facilities in

section 28.1 of the Electricity Act, 1998 and in

the regulations made under that Act.

Conflict

(12.2) In

the event of a conflict between

section 28.1 of the Electricity

Act, 1998 or any regulation made under that Act in relation to a matter

specified in that section, as applicable, and an order, code or licence issued

by the Board,

section 28.1 or the regulation, as applicable, prevails.

The Act is amended by adding the following section:

Payments

to transmitters from public funds

78.3

(1) The

Minister may make payments to a transmitter out of money appropriated for the

purposes of this

section by the Legislature, if any.

Rate

reduction

(2) The

Board shall, in approving or fixing just and reasonable rates under

section 78 for

a transmitter, reduce the rates to reflect amounts paid to the transmitter

under subsection (1).

(1) Subsection 96 (2) of the Act is amended by adding the following

paragraph:

2. Supporting

economic growth in a manner consistent with the policies of the Government of

Ontario.

(2) Section

96 of the Act is amended by adding the following subsection:

Same

(3) In

an application under

section 92, the Board shall consider such reports,

documents or other information as may be prescribed by the regulations.

Subsection 97.1 (2) of the Act is repealed.

Subsection 97.2 (4) of the Act is repealed.

Bill

5 ( Protect Ontario by Unleashing our Economy Act, 2025 )

(1) This

section applies only if Bill 5 ( Protect

Ontario by Unleashing our Economy Act, 2025 ), introduced on April 17,

2025, receives Royal Assent.

(2) References

in this

section to provisions of Bill 5 are references to those provisions as

they were numbered in the first reading version of the Bill.

(3) Section

43.1 of the Ontario Energy Board Act, 1998 is

amended by adding the following subsections:

Deferral

or variance accounts

(5) A

gas distributor, gas transmitter or storage company that is prescribed for the

purposes of subsection (1) and for which rates are approved or fixed by the

Board under

section 36 may establish a deferral or variance account that

records,

(

a) the

costs incurred by the gas distributor, gas transmitter or storage company as a

result of complying with the subsection; and

(

b) the

interest costs incurred on the principal balance of the account, as the Board

may direct.

Same

(6) The

Board shall, from time to time or as prescribed by the regulations, make an

order under

section 36 that determines whether and how amounts recorded in an

account referred to in subsection (5) shall be reflected in rates approved or

fixed under that section, subject to any requirements prescribed by the

regulations.

(4) Section

73 of the Ontario Energy Board Act, 1998 is amended

by adding the following subsections:

Deferral

or variance accounts

(6) A

licensee that is prescribed for the purposes of subsection (2) and for which

rates are approved or fixed by the Board under

section 78 may establish a

deferral or variance account that records,

(

a) the

costs incurred by the licensee as a result of complying with the subsection;

and

(

b) the

interest costs incurred on the principal balance of the account, as the Board

may direct.

Same

(7) The

Board shall, from time to time or as prescribed by the regulations, make an

order under

section 78 that determines whether and how amounts recorded in an account

referred to in subsection (6) shall be reflected in rates approved or fixed

under that section, subject to any requirements prescribed by the regulations.

Commencement

This

Schedule comes into force on the day the Protect

Ontario by Securing Affordable Energy for Generations Act, 2025 receives

Royal Assent.

Date Bill stage Event Outcome Committee

December 11, 2025

Royal Assent

Royal Assent received

December 8, 2025

Third Reading

Vote

Carried on division

December 4, 2025

Third Reading

Question put

Vote deferred

December 4, 2025

Third Reading

Debated

December 4, 2025

Third Reading

Debated

Debate adjourned

December 3, 2025

Second Reading

Ordered for Third Reading pursuant to the Order of the House

December 3, 2025

Second Reading

Report adopted

December 3, 2025

Second Reading

Reported as amended

Standing Committee on the Interior

December 2, 2025

Second Reading

Consideration of a Bill

Standing Committee on the Interior

November 25, 2025

Second Reading

Consideration of a Bill

Standing Committee on the Interior

November 18, 2025

Second Reading

Consideration of a Bill

Standing Committee on the Interior

November 17, 2025

Second Reading

Ordered referred to Standing Committee pursuant to the Order of the House

Standing Committee on the Interior

November 17, 2025

Second Reading

Vote

Carried on division

November 17, 2025

Second Reading

Question put

Vote deferred

November 6, 2025

Second Reading

Time allocated

November 4, 2025

Second Reading

Debated

Debate adjourned

November 3, 2025

Second Reading

Debated

Debate adjourned

October 30, 2025

Second Reading

Debated

Debate adjourned

October 30, 2025

Second Reading

Debated

Debate adjourned

June 3, 2025

First Reading

Ordered for Second Reading

June 3, 2025

First Reading

Vote

Carried

First Reading

June 3, 2025

Carried

Ordered for Second Reading

Second Reading

October 30, 2025

Principal Debaters

Lecce, Hon. Stephen

King—Vaughan

Oosterhoff, Hon. Sam

Niagara West

Smith, David

Scarborough Centre

Questions and Responses

Hamid, Hon. Zee

Milton

Hsu, Ted

Kingston and the Islands

Mamakwa, Sol

Kiiwetinoong

Shaw, Sandy

Hamilton West—Ancaster—Dundas

October 30, 2025

Principal Debaters

Hsu, Ted

Kingston and the Islands

Kernaghan, Terence

London North Centre

Tabuns, Peter

Toronto—Danforth

Vanthof, John

Timiskaming—Cochrane

Questions and Responses

Bell, Jessica

University—Rosedale

Cerjanec, Rob

Ajax

Clancy, Aislinn

Kitchener Centre

Cuzzetto, Rudy

Mississauga—Lakeshore

Gilmour, Alexa

Parkdale—High Park

Glover, Chris

Spadina—Fort York

McMahon, Mary-Margaret

Beaches—East York

Racinsky, Joseph

Wellington—Halton Hills

Wai, Daisy

Richmond Hill

November 3, 2025

Principal Debaters

Allsopp, Tyler

Bay of Quinte

Anand, Deepak

Mississauga—Malton

Begum, Doly

Scarborough Southwest

Blais, Stephen

Orléans

Kerzner, Hon. Michael

York Centre

McMahon, Mary-Margaret

Beaches—East York

Saunderson, Brian

Simcoe—Grey

West, Jamie

Sudbury

Questions and Responses

Bowman, Stephanie

Don Valley West

Fife, Catherine

Waterloo

Gates, Wayne

Niagara Falls

Hamid, Hon. Zee

Milton

Kernaghan, Terence

London North Centre

McKenney, Catherine

Ottawa Centre

Oosterhoff, Hon. Sam

Niagara West

Pierre, Natalie

Burlington

Racinsky, Joseph

Wellington—Halton Hills

Schreiner, Mike

Guelph

Thompson, Hon. Lisa

Huron—Bruce

Vanthof, John

Timiskaming—Cochrane

Watt, Tyler

Nepean

November 4, 2025

Principal Debaters

Gélinas, France

Nickel Belt

Questions and Responses

Allsopp, Tyler

Bay of Quinte

Clancy, Aislinn

Kitchener Centre

Hsu, Ted

Kingston and the Islands

Saunderson, Brian

Simcoe—Grey

West, Jamie

Sudbury

November 6, 2025

Time allocated

November 17, 2025

Question put

November 17, 2025

Carried on division

Ordered referred to Standing Committee pursuant to the Order of the House

Standing Committee on the Interior

December 3, 2025

Reported as amended

Standing Committee on the Interior

Report adopted

Ordered for Third Reading pursuant to the Order of the House

Third Reading

December 4, 2025

Principal Debaters

Ciriello, Monica

Hamilton Mountain

Dixon, Jess

Kitchener South—Hespeler

Fairclough, Lee

Etobicoke—Lakeshore

Gélinas, France

Nickel Belt

Hsu, Ted

Kingston and the Islands

Kernaghan, Terence

London North Centre

Mamakwa, Sol

Kiiwetinoong

Oosterhoff, Hon. Sam

Niagara West

Schreiner, Mike

Guelph

Stevens, Jennifer (Jennie)

St. Catharines

Vickers, Paul

Bruce—Grey—Owen Sound

December 4, 2025

Debated

December 4, 2025

Question put

December 8, 2025

Carried on division

Royal Assent

December 11, 2025

Royal Assent received